June 20, 2000

Kristin Zhivago Reveals What Businesses are Doing Right -- and What They Are Doing Very, Very Wrong

SUMMARY: Kristin Zhivago has been one of America’s most famous B2B marketing strategy consultants since she first opened her doors in Silicon Valley in 1979. Her clients have ranged from hot Web start-ups to Fortune 500 companies. We chatted with her last week as she lounged on her PassPort 37 boat anchored outside Newport Rhode Island (nice life if you can get it!)
Q: Who do you think is doing brilliant B-to-B marketing online these days to the medium-big business marketplace, and what is so brilliant about what they are doing?

KZ: I'd have to say that I've been admiring Works.com for some time. They're selling to small, medium, and large businesses, and they have focused on providing value from the get-go. The CEO is a former marketer. They didn't even launch until they had gotten the site to a state of highly evolved usability. Once a week, the entire company sits around a speakerphone while a customer on the other end goes through the site and makes comments. These phone calls have kept the company rooted in reality. The entire site is designed around how the customer BUYS rather than how Works.com SELLS.

Another company that has impressed me is selling direct to consumers: LendingTree. Again, through research, they uncovered the customer's biggest emotional trigger related to loans: the *customer* wants to be in control of the lending process. LendingTree's TV commercials are both entertaining and completely on-target, something that most dot-coms have failed to do. (They usually create something off-the-wall, and then tack their name on at the end. This isn't marketing. It's mental masturbation.)

Both of these companies understand the importance of building solid partnerships with customers, and then using those partnerships to convince the marketplace that they are one of the market leaders. They understand what I call "momentum marketing." For example, Works.com recently sent out a press release stating that "Over 1,000 Companies Slash Business Purchasing Costs with Works.com." The benefit to the customer is right there in the release (slashing business purchasing costs), but so is the *proof* that Works.com is on a roll.

Q: What are the most common mistakes you see in big businesses marketing themselves online these days?

KZ: I see Web sites going through 5 phases of evolution: Communication, Interaction, Transaction, Collaboration and Habituation. Dot-coms understood from the start that if they didn't offer transactional capabilities, they'd die. After all, they were depending on those transactions for their income. They're still learning how to provide meaningful collaboration, and very few of them have reached the habituation stage, which requires that you get out of your own ego/goals, understand what the customer wants, and give it to them. myYahoo! is an example of a site that has achieved habituation. So is Amazon.com.

The big businesses started at the Communication phase, which is where many of them remain to this day. They don't even provide a webmaster address or the ability to register for something valuable (like a white paper)--which is the simplest form of Interaction. This is true of their external sites (their corporate websites and any "extranets" they've created), and their intranets, which are springing up like weeds out there in the big corporations. Next to wireless, this is one of the fastest-growing areas of growth right now.

People who work in big companies have difficulty getting close to the customer because they're so busy interacting with each other. Their entire world revolves around pleasing their bosses and surviving the political agendas of their peers. Who has time to talk to customers? The only people who talk to customers daily are salespeople and customer service reps. No one pays any attention to customer service reps, which is a crime, and marketers often ignore salespeople because they tend to be too passionate about their most recent sales call. Marketing looks at groups of customers, not one customer at a time, in spite of all the hoopla about one-to-one marketing. One-to-one comes into play *after* you have identified the group that you're going to sell to.

The solution is for the marketer--and everyone else in marketing--to talk to at least 2 customers a week, on the phone, asking open-ended questions. The notes from these conversations should be gathered by a marketing admin person and "published" monthly to everyone in the company. It's the cheapest form of research a company can conduct, and it gives marketers the one thing that they never have enough of: confidence. They often know the right thing to do--or think they know--but don't have the proof to back it up. Doing this one simple thing, consistently, can change the entire dynamic of marketing in large (and smaller) companies. It can put marketers in a position of power. The customer is the only person who can give a marketer that power.

If you want to know what prospects and customers think of your website, conduct web tour interviews by phone. During the phone call, just start at the home page and ask them to go through the site as they normally do (or would), and tell you what they're thinking as they do. Record the conversation (tell them ahead of time, of course), and save screens as you go. The screens and the transcript of the conversation will tell you as much as you'd get using fancy "over the shoulder" usability studies. Use these reports to convince management to give you the resources you need to improve your site.

Q: What can traditional B-to-B companies learn about marketing themselves online from some of the dot-coms you've worked with?

KZ: The wonderful thing about dot-coms--and all entrepreneurial companies--is they don't hesitate to make the right decision, and if they make the wrong decision, they move quickly to correct it. Larger companies miss out on tremendous opportunities because they take too long to make decisions. Each person in the company puts so much energy into getting "approval" that the marketplace has moved on by the time they finally go public with their ideas. The only thing that saves them is the fact that big companies are often more comfortable buying from other big companies, and they're also on the trailing edge of adoption, so they buy and sell to each other. But a customer-focused dot-com company--*especially* one that practices momentum marketing!--can easily beat a larger company.

NEXT WEEK: Zhivago tells us how to hire great B-to-B Internet marketers and how wireless technology will transform your marketing … sooner than you think.

If you’d like to read more Zhivago wisdom in the meantime, or learn more about her consultancy, check out her Web site at: http://www.zhivago.com

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